President Obama used a prime-time television address Monday to urge compromise during a bitter struggle over raising the nation’s debt ceiling, even as he firmly backed a Democratic plan and dismissed a GOP proposal.
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One week before the nation reaches a debt ceiling that, if not raised, would lead to what Obama warned would be dire financial consequences, the president made a direct appeal to the American people to urge Congress to reach a deal. “The American people may have voted for divided government, but they didn’t vote for a dysfunctional government,” Obama said, while urging support for a plan put forward by Senate Majority Leader Harry Reid, D-Nev., that Republicans have rejected.
“It is a dangerous game we’ve never played before and we can’t afford to play it now,” the president said. “We can’t allow the American people to become collateral damage to Washington’s political warfare.”
But in a response that immediately followed Obama’s appeal, House Speaker John Boehner, R-Ohio, accused the president of seeking a “blank check” to continue Washington’s “spending binge” that has driven debt to stratospheric levels.
Boehner also said that he and the president had reached a deal in principle last week, before Obama changed the terms. “Unfortunately, the president would not take yes for an answer,” he said.
Earlier Monday, Republicans and Democrats in Congress had put forward competing plans to raise the debt ceiling.
One key difference in the plans was that the GOP measure would require additional action to deal with the debt before the 2012 election. Democrats have sought to avoid another round of debt debate before that crucial vote.
Senate Democrats crafted a bill that would raise the debt ceiling by $2.4 trillion and make a $2.7 trillion dent in the nation’s deficit without imposing tax increases.
“All in all, it’s an offer that Republicans can’t refuse,” said Sen. Charles Schumer, D-N.Y. “If they oppose this, why? It’s got everything they’ve asked for.”
Reid said his plan would be on the Senate floor on Monday, with a vote on it scheduled for later in the week.
But Republicans swiftly rejected the Democratic plan, saying it is full of budget gimmickry and does not achieve the savings or spending reforms necessary to bolster the economy and stave of a credit-rating downgrade.
For instance, it includes $1 trillion in savings from the planned winding down of the wars in Iraq and Afghanistan. And Republicans want a bill that significantly reforms Social Security and Medicare. The Reid plan does not address entitlements directly.
Republicans expect to put their own plan on the floor Wednesday. It would increase the debt ceiling in two installments and make significant spending cuts each time.
The first debt-ceiling increase would amount to about $1 trillion and would require new spending caps that would cut $1.2 trillion over 10 years. The second debt-ceiling increase, which would be required by spring, would have to include $1.8 trillion in savings from a variety of sources, including entitlements.
Congress would appoint a bipartisan committee to come up with the $1.8 trillion in savings. There could be no increase in the debt ceiling if Congress does not approve those savings.
The GOP proposal also calls for both the House and the Senate to vote on a balanced budget amendment.
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